U.S. demands to seize emails stored on a Microsoft server in Ireland are threatening the privacy of U.S. citizens, Microsoft said in its appeal in an ongoing lawsuit that threatens international relations and may violate European privacy laws.

Microsoft is battling a U.S. district court ruling to hand over emails to U.S. law enforcement. The company was ordered to hand over the data despite it being stored on a server in Dublin, Ireland. According to the district court, the location of the data is not relevant and seeking cooperation with Irish authorities is not necessary for a warrant's powers to reach abroad.

"Imagine this scenario. Officers of the local Stadtpolizei investigating a suspected leak to the press descend on Deutsche Bank headquarters in Frankfurt, Germany. They serve a warrant to seize a bundle of private letters that a New York Times reporter is storing in a safe deposit box at a Deutsche Bank USA branch in Manhattan. The bank complies by ordering the New York branch manager to open the reporter's box with a master key, rummage through it, and fax the private letters to the Stadtpolizei," Microsoft said in the brief.

The German government could argue in that hypothetical case that it did not conduct an extraterritorial search, but ordered a German company to produce its own business records, which were in its own possession, Microsoft said. Meanwhile, the American reporter's privacy interests would be fully protected because the Stadtpolizei secured a warrant from a neutral magistrate, it said.

However, the U.S. Secretary of State would be outraged by this attempt to bypass formal procedures that the EU and the U.S. have agreed on, Microsoft said. "No way would that response satisfy the U.S. Government," it said in the court filing.

The case at issue is a digital version of this scenario, Microsoft said, adding that the power to embark on unilateral law enforcement incursions into a foreign sovereign country has profound foreign policy consequences. "Worse still, it threatens the privacy of U.S. citizens."

If the U.S. government prevails here, the U.S. will have no ground to complain when foreign agents raid Microsoft offices in their jurisdictions and order them to download U.S. citizens' private emails, Microsoft said. "That would put all of our private digital information at risk, not just emails, but everything else we store on remote computers collectively called 'the cloud' -- a veritable 'cache of sensitive personal information' saturated with the highest constitutional privacy rights."

The district court based its ruling on the Electronic Communications Privacy Act (ECPA). To avoid international discord, courts usually presume that federal statutes do not apply extraterritorially, unless Congress expressed a clear intent to do so, which it did not in this case, Microsoft said. Nor did Congress express any intention to allow the government to ignore any international treaties, it added.

Nevertheless, the district court upheld the extraterritorial execution of the warrant, arguing that the term "warrant," in this case actually meant a "hybrid" subpoena, indistinguishable from the type that can compel a bank to produce its own transaction records from a foreign branch.

"If the Government wants the unprecedented power it claims here, it should plead its case to Congress. Meanwhile, the warrant issued here cannot reach emails stored in Ireland, and the judgment should be reversed," Microsoft told the appeals court.

The case so far raised more than a couple of eyebrows in the EU where the Irish government last month asked the European Commission for legal aid in the case. If the U.S. Department of Justice were to get its way in the case, European data protection laws may effectively be bypassed, the Irish government warned.

Loek is Amsterdam Correspondent and covers online privacy, intellectual property, online payment issues as well as EU technology policy and regulation for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to loek_essers@idg.com

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